REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT, dated as of January 18, 2007, is entered into by and between MISCOR GROUP, LTD., an Indiana corporation (the “ Company ”), TONTINE CAPITAL PARTNERS, L.P., a Delaware limited partnership (“ TCP ” or a “ Purchaser ”) and TONTINE CAPITAL OVERSEAS MASTER FUND, L.P., a Cayman Islands limited partnership ( a “ Purchaser ” and together with TCP, the “ Purchasers ”) .

A.   The Company desires to issue and sell 62,500,000 shares of its Common Stock to the Purchasers as set forth in the Securities Purchase Agreement dated as of January 18, 2007, entered into by and between the Company and the Purchasers (the “ Securities Purchase Agreement ”);

B.   It is a condition precedent to the consummation of the transactions contemplated by the Securities Purchase Agreement that the Company provide for the rights set forth in this Agreement; and

C.   Certain terms used in this Agreement are defined in Article 1 hereof.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound, the parties hereto hereby agree as follows:

“ Affiliate ” means any Person that directly or indirectly controls, or is under control with, or is controlled by such Person. As used in this definition, “control” (including with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

“ Business Day ” means any day excluding Saturday, Sunday or any other day which is a legal holiday under the laws of the State of Indiana or is a day on which banking institutions therein located are authorized or required by law or other governmental action to close.

“ Closing Date ” has the meaning ascribed to such term in the Securities Purchase Agreement.

“ Common Stock ” means the common stock, no par value per share, of the Company.

“ Company ” has the meaning set forth in the preamble.

“ Demand Notice ” has the meaning set forth in Section 2.3 .

“ Designated Holders ” means the Purchasers and any qualifying transferees of the Purchasers under Section 3.1 hereof who hold Registrable Securities.

“ Effectiveness Date ” means (a) with respect to the initial Registration Statement required to be filed under Section 2.2(a) , the earlier of: (i) the first anniversary of the Closing Date, and (ii) the fifth trading day following the date on which the Company is notified by the SEC that the initial Registration Statement will not be reviewed or is no longer subject to further review and comments, and (b) with respect to any additional Registration Statements that may be required pursuant to Section 2.2(b) , the earlier of (i) the 120 ^th day following (x) if such Registration Statement is required because the SEC shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration Statement, the date or time on which the SEC shall indicate as being the first date or time that such Registrable Securities may then be included in a Registration Statement, or (y) if such Registration Statement is required for a reason other than as described in (x) above, the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement(s) is required, and (ii) the fifth trading day following the date on which the Company is notified by the SEC that such additional Registration Statement will not be reviewed or is no longer subject to further review and comment.

“ Effectiveness Period ” has the meaning set forth in Section 2.2(a) .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Filing Date ” means (a) with respect to the initial Registration Statement required to be filed under Section 2.2(a) , the date which is six months following the Closing Date, and (b) with respect to any additional Registration Statements that may be required pursuant to Section 2.2(b) , the 45 ^th day following (x) if such Registration Statement is required because the SEC shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration Statement, the date or time on which the SEC shall indicate as being the first date or time that such Registrable Securities may then be included in a Registration Statement, or (y) if such Registration Statement is required for a reason other than as described in (x) above, the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement(s) is required.

“ Indemnified Party ” has the meaning set forth in Section 2.9 .

“ Losses ” has the meaning set forth in Section  2.9 .

“ Majority Holders ” means those Designated Holders holding a majority of the Registrable Securities.

“ Person ” means any individual, company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental body or other entity.

“ Piggyback Registration ”   has the meaning set forth in Section 2.4 .

“ Purchasers ” has the meaning set forth in the preamble.

“Purchase Price” has the meaning ascribed to such term in the Securities Purchase Agreement.

“ Registrable Securities ” means, subject to the immediately following sentences, (i) shares of Common Stock acquired by the Purchasers from the Company pursuant to the Securities Purchase Agreement or, so long as this Agreement is still in effect, any other shares of Common Stock acquired by the Purchasers after the Closing Date, and (ii) any shares of Common Stock issued or issuable, directly or indirectly, with respect to the securities referred to in clause (i) by way of stock dividend or stock split or

in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. In addition, any particular shares of Common Stock constituting Registrable Securities will cease to be Registrable Securities when they (x) have been effectively registered under the Securities Act and disposed of in accordance with a Registration Statement covering them, (y) have been sold to the public pursuant to Rule 144 (or by similar provision under the Securities Act), or (z) are eligible for resale under Rule 144(k) (or by similar provision under the Securities Act) without any limitation on the amount of securities that may be sold under paragraph (e) thereof.

“ Registration Statement ” means a registration statement on Form S-3 (or, if the Company is not eligible to use Form S-3, such other appropriate registration form of the SEC pursuant to which the Company is eligible to register the resale of Registrable Securities) filed by the Company under the Securities Act which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference in such registration statement, which shall permit the Purchasers to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, the Registrable Securities.

“ register ,” “ registered ” and “ registration ” each shall refer to a registration effected by preparing and filing a registration statement or statements or similar documents in compliance with the Securities Act and the declaration or ordering of effectiveness of such registration statement(s) or documents by the SEC.

“ Representatives ” has the meaning set forth in Section 2.9 .

“ Rule 144 ” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

“ Rule 415 ” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

“ SEC ” means the United States Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Securities Purchase Agreement ” has the meaning set forth in the recitals.

2.1   Current Public Information . The Company covenants that it will use its best efforts to file all reports required to be filed by it under the Exchange Act and the rules and regulations adopted by the SEC thereunder, and will use its reasonable best efforts to take such further action as the Designated Holders may reasonably request, all to the extent required to enable the Designated Holders to sell Registrable Securities pursuant to Rule 144 or Rule 144A adopted by the SEC under the Securities Act or any similar rule or regulation hereafter adopted by the SEC. The Company shall, upon the request of a Designated Holder, deliver to such Designated Holder a written statement as to whether it has complied with such requirements during the twelve month period immediately preceding the date of such request.

2.2   Registration .

(a)   On or prior to each Filing Date, the Company shall prepare and file with the SEC a Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall provide for the resale from time to time, and pursuant to any method or combination of methods legally available by the Designated Holders of any and all Registrable Securities. The Company shall use its reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its reasonable best efforts to keep the Registration Statement continuously effective, supplemented and amended to the extent necessary to ensure that is available for the resale of all Registrable Securities by the Designated Holders and that it conforms in all material respects to the requirements of the Securities Act during the entire period beginning on the Effectiveness Date and ending on the date on which all Registrable Securities have ceased to be Registrable Securities. (the “ Effectiveness Period ” ). 

(b)   If for any reason the SEC does not permit all of the Registrable Securities to be included in a Registration Statement filed pursuant to Section 2.2(a) or for any other reason all Registrable Securities then outstanding are not then included in such an effective Registration Statement, then the Company shall prepare and file as soon as reasonably possible after the date on which the SEC shall indicate as being the first date or time that such filing may be made, but in any event by the Filing Date therefore, an additional Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. Each such Registration Statement shall provide for the resale from time to time, and pursuant to any method or combination of methods legally available by the Designated Holders of any and all Registrable Securities. The Company shall use its reasonable best efforts to cause each such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its reasonable best efforts to keep such Registration Statement continuously effective under the Securities Act during the entire Effectiveness Period.

(c)   The Company may, at any time it is eligible to do so, file a post-effective amendment on Form S-3 to any Registration Statement on Form S-1 for the resale of any then existing Registrable Securities or in any such other manner as is preferred or permitted by the SEC to convert such Registration Statement to a Form S-3 Registration Statement. Upon the effectiveness of such Form S-3 Registration Statement, all references to a Registration Statement in this Agreement shall then automatically be deemed to be a reference to the Form S-3 Registration Statement.

2.3   Demand Registration . In addition to the registration obligations of the Company set forth in Section 2.2 herein, the following provisions shall apply:

(a)   Subject to Section 2.3(i) , upon the written request of the Majority Holders, requesting that the Company effect the registration under the Securities Act of all or part of such Designated Holders’ Registrable Securities and specifying the intended method of disposition thereof (the “ Demand Notice ”), the Company will promptly give written notice of such requested registration to all Designated Holders, and thereupon the Company will use its reasonable best efforts to file with the SEC as soon as reasonably practicable following the Demand Notice (but in no event later than the date that is 90 days after the Demand Notice) a Registration Statement. The Company shall use its reasonable best efforts to cause such Registration Statement to be declared effective by the SEC within 90 days after the initial filing of the Registration Statement. The Company shall include in such Registration Statement:

(i)   the Registrable Securities which the Company has been so requested to be registered by such Designated Holders for disposition in accordance with the intended method of disposition stated in such request;

(ii)   all other Registrable Securities the holders of which shall have made a written request to the Company for registration thereof within 30 days after the giving of such written notice by the Company (which request shall specify the intended method of disposition of such Registrable Securities); and

(iii)   all shares of Common Stock which the Company or Persons entitled to exercise “piggy-back” registration rights pursuant to contractual commitments of the Company may elect to register in connection with the offering of Registrable Securities pursuant to this Section 2.3 ;

all to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities and the additional shares of Common Stock, if any, so to be registered; provided, that, the provisions of this Section 2.3 shall not require the Company to effect more than two registrations of Registrable Securities.

(b)   Notwithstanding anything to the contrary contained in this Agreement, the Company shall not be required to effect a registration pursuant to this Section 2.3 within 180 days following the effective date of a registration statement filed by the Company in accordance with Sections 2.2 , 2.3 or 2.4 for the account of another Designated Holder of Registrable Securities if the Designated Holders were afforded the opportunity to include the Registrable Securities in such registration.

(c)   The registrations under this Section 2.3 shall be on an appropriate Registration Statement that permits the disposition of such Registrable Securities in accordance with the intended methods of distribution specified by the Majority Holders in their request for registration. The Company agrees to include in any such Registration Statement all information which Designated Holders of Registrable Securities being registered shall reasonably request to effect the registration.

(d)   A registration requested pursuant to this Section 2.3 shall not be deemed to have been effected (i) unless a Registration Statement with respect thereto has become effective; provided, that a Registration Statement which does not become effective after the Company has filed a Registration Statement with respect thereto solely by reason of the refusal to proceed of the Majority Holders (other than a refusal to proceed based upon the advice of counsel relating to a matter with respect to the Company) or because of a breach of this Agreement by any Designated Holder shall be deemed to have been effected by the Company at the request of the Majority Holders unless the Designated Holders electing to have Registrable Securities registered pursuant to such Registration Statement shall have elected to pay all fees and expenses otherwise payable by the Company in connection with such registration pursuant to Section 2.8 , (ii) if, after it has become effective, such registration is withdrawn by the Company (other than at the request of the Majority Holders) or interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court for any reason prior to the expiration of a 180 day period following such Registration Statement’s effectiveness, or (iii) if the conditions to closing specified in any purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than due solely to some act or omission by the Designated Holders electing to have Registrable Securities registered pursuant to such Registration Statement.

(e)   Intentionally Omitted.

(f)   If a requested registration pursuant to this Section 2.3 involves an underwritten offering, and the managing underwriter shall advise the Company in writing (with a copy to each Designated Holder of Registrable Securities requesting registration) that, in its opinion, the number of securities requested to be included in such registration (including securities of the Company which are not Registrable Securities) exceeds the number which can be sold in such offering within a price range reasonably acceptable to the Company and to the holders of a majority (by number of shares) of the Registrable Securities requested to be included in such Registration Statement, the Company will include in such registration, to the extent of the number which the Company is so advised can be sold in such offering, (i) first, the Registrable Securities which have been requested to be included in such registration by the Designated Holders pursuant to this Agreement (pro rata based on the amount of Registrable Securities sought to be registered by such Persons), (ii) second, provided that no securities sought to be included by the Designated Holders have been excluded from such registration, the securities of other Persons entitled to exercise “piggy-back” registration rights pursuant to contractual commitments of the Company (pro rata based on the amount of securities sought to be registered by such Persons) and (iii) third, securities the Company proposes to register.

(g)   The Company shall use its reasonable best efforts to keep any Registration Statement filed pursuant to this Section 2.3 continuously effective (i) for a period of two years after the Registration Statement first becomes effective, plus the number of days during which such Registration Statement was not effective or usable pursuant to Sections   2.6(e) or 2.6(i) ; or (ii) if such Registration Statement related to an underwritten offering, for such period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer. In the event the Company shall give any notice pursuant to Sections 2.6(e) or (i) , the additional time period mentioned in Section 2.3(f)(i) during which the Registration Statement is to remain effective shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Sections 2.6(e) or (i) to and including the date when each seller of a Registrable Security covered by the Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by Sections 2.6(e) or (i) .

(h)   The Company shall have the right at any time, to suspend the filing of a Registration Statement under this Section 2.3 or require that the Designated Holders of Registrable Securities suspend further open market offers and sales of Registrable Securities pursuant to a Registration Statement filed hereunder for a period not to exceed an aggregate of 30 days in any six month period or an aggregate of 60 days in any twelve-month period for valid business reasons (not including avoidance of their obligations hereunder) (i) to avoid premature public disclosure of a pending corporate transaction, including pending acquisitions or divestitures of assets, mergers and combinations and similar events; (ii) upon the occurrence of any of the events specified in Section 2.6(e) , until the time that the Designated Holders receive copies of a supplement or amendment to the prospectus included in the applicable Registration Statement as contemplated in Section 2.6(e) ; and (iii) upon the occurrence of any of the events specified in Section 2.6(i) , until the time the Company notifies the Designated Holders in writing that such suspension is no longer effective.

(i)   The right of Designated Holders to register Registrable Securities pursuant to this Section 2.3 is only exercisable if, prior to the expiration of the Effectiveness Period, the Company becomes ineligible to register the Registrable Securities on the Registration Statement contemplated by Section 2.2 or such Registration Statement otherwise becomes unusable (other than due solely to some act or omission by the Designated Holders electing to have Registrable Securities registered pursuant to such Registration Statement) or ineffective and the Company is not able to correct the misstatements, have the applicable stop order rescinded or otherwise restore the effectiveness of the Registration Statement as contemplated by this Agreement.

2.4   Piggyback Registration . 

(a)   Whenever the Company proposes to register any of its securities under the Securities Act (other than pursuant to a registration pursuant to Section 2.2 or Section 2.3 or a registration on Form S-4 or S-8 or any successor or similar forms) and the registration form to be used may be used for the registration of Registrable Securities, whether or not for sale for its own account, the Company will give prompt written notice (but in no event less than 30 days before the anticipated filing date) to all Designated Holders (other than Designated Holders all of whose Registrable Securities are then covered by an effective Registration Statement), and such notice shall describe the proposed registration and distribution and offer to all such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request. The Company will include in such registration statement all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 15 days after the Designated Holders’ receipt of the Company’s notice (a “ Piggyback Registration ”).

(b)   The Company shall use its reasonable best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering involving a Piggyback Registration to permit the Registrable Securities requested to be included in a Piggyback Registration to be included on the same terms and conditions as any similar securities of the Company or any other security holder included therein and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method of distribution thereof.

(c)   Any Designated Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any Registration Statement pursuant to this Section 2.4 by giving written notice to the Company of its request to withdraw; provided, that in the event of such withdrawal (other than pursuant to Section 2.4(e) hereof, the Company shall not be required to reimburse such Designated Holder for the fees and expenses referred to in Section 2.8 hereof incurred by such Designated Holder prior to such withdrawal, unless such withdrawal was due to a material adverse change to the Company. The Company may withdraw a Piggyback Registration at any time prior to the time it becomes effective.

(d)   If (i) a Piggyback Registration involves an underwritten offering of the securities being registered, whether or not for sale for the account of the Company, to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction, and (ii) the managing underwriter of such underwritten offering shall inform the Company and Designated Holders requesting such registration by letter of its belief that the distribution of all or a specified number of such Registrable Securities concurrently with the securities being distributed by such underwriters would interfere with the successful marketing of the securities being distributed by such underwriters (such writing to state the basis of such belief and the approximate number of such Registrable Securities which may be distributed without such effect), then the Company will be required to include in such registration only the amount of securities which it is so advised should be included in such registration. In such event: (x) in cases initially involving the registration for sale of securities for the Company’s own account, securities shall be registered in such offering in the following order of priority: (i) first, the securities which the Company proposes to register, and (ii) second, Registrable Securities and securities which have been r